This pamphlet, written by leading Socialist Workers’ Party (SWP) ideologue Chris Harman, claims to present a socialist standpoint on the crisis. It does anything but. Its analysis of the crisis lacks coherence; in arguing for action on the series of demands which form the ‘People before Profits Charter’ it does not acknowledge, let alone explain, why the socialist and working class movement in Britain is at its weakest for more than a century. Furthermore, at a time when millions of people throughout the world are struggling against imperialism, the word imperialism does not appear once in the pamphlet’s 34 pages.

Harman on capitalism In order to understand the crisis, socialists have to be clear about the laws of motion of capitalism as a whole. Harman is not. Throughout the pamphlet he presents capitalism and its crisis from the standpoint of the individual capitalist who experiences life as one of constant competition. Marx understood that it is accumulation that is the driving force of capitalism, but for Harman: ‘The driving force of capitalism is not the satisfaction of people’s needs, but the competition between capitalists to make profits. Human needs are only satisfied insofar as doing so contributes to the profit drive’ (p11). He repeats the point:

‘However, the system... also escapes to a very great degree from the control of the capitalists themselves. Each time one capitalist succeeds in accumulating and expanding the means for producing wealth other capitalists are forced to do the same if they want to stay in business. Competition means they have no choice but to accumulate. They have to accumulate in order to make profits and make profits to accumulate in an endless process’ (p13).

Marx showed that it is not competition that leads to accumulation, but accumulation – the expression of the social relations of production of capitalism – that necessarily provokes competition. Marx develops the concept of capital before consideration of ‘many capitals’ or their interaction through competition. He argues that ‘a fall in the rate of profit connected with accumulation necessarily calls forth a competitive struggle...not vice versa’ (Capital Vol 3 p251).

Harman replaces Marx’s materialist analysis with idealism: capital is about ‘drive’ and ‘choice’, or lack of it, a ‘competition to see who is greediest’ (p3). Accumulation is not contained within the concept of capital but is the outcome of individual capitalists’ desire to stay ahead of each other (p16). By presenting competition as the primary force within capitalism, Harman cannot analyse its tendency towards monopoly, conveniently avoiding that ultimate expression of monopoly capitalism, imperialism. But, by the same token, if we are just dealing with subjective questions as choice, drive or greed, might these not be held in check by some external intervention – say, by the state?

Not just an idealist, Harman is also an eclectic: he presents different explanations as to why a crisis occurs within capitalism. On page 3, greed is the ‘the simple explanation for the cause of the crisis.’ On page 14, however, it is because of a shortage of raw materials and components leading to rising costs. Later on in the same page it is because there is ‘overproduction’ – people cannot afford to buy the goods that have been produced. Further on, on page 16, it is because of a ‘downward pressure on profit rates’, a consequence itself of the competition process. Which ‘cause’ is decisive is never clear. For Marxists, however, the crisis occurs when: ‘the expansion of production outruns its profitability, when existing conditions of exploitation preclude a further profitable capital-expansion or what amounts to the same thing, an increase of accumulation does not increase the mass of surplus-value or profits, an absolute over-accumulation has occurred and the accumulation process comes to a halt. This interruption of the accumulation or its stagnation constitutes the capitalist crisis. It represents an overproduction of capital with respect to the degree of exploitation. From the point of view of profitability at this stage, existing capital is at the same time too small and too large. It is too large in relation to the existing surplus-value and it is not large enough to overcome the lack of surplus-value.’ (Paul Bullock and David Yaffe, Inflation, crisis and the post-war boom, here)

At a certain historical point the tendency towards capitalist breakdown or crisis expresses itself in the development of imperialism: ‘The aggressive character of imperialism likewise necessarily flows from a crisis of valorisation.* Imperialism is a striving to restore the valorisation of capital at any cost, to weaken or eliminate the breakdown tendency. This explains its aggressive policies at home (an intensified attack on the working class) and abroad (a drive to transform foreign nations into tributaries). This is the hidden basis of the bourgeois rentier state, of the parasitic character of capitalism at an advanced stage of accumulation. Because the valorisation of capital fails in countries at a given, higher stage of accumulation, the tribute that flows in from abroad assumes ever greater importance. Parasitism becomes a method of prolonging the life of capitalism.’ (Henryk Grossman: The law of accumulation and breakdown of the capitalist system, Pluto Press, pp122-3). [*By valorisation is meant the reproduction and expansion of capital through the exploitation of labour.]

Imperialism is not a political expedient or whim, but arises from the crisis of accumulation. Whilst Lenin in his writings was primarily concerned with the political consequences of imperialism – the division of the world into oppressor and oppressed nations and the split in the working class in the oppressor nation – his standpoint followed from an understanding of the capitalist crisis which we have set out. Not to mention him in a pamphlet of this character demonstrates a complete lack of Marxist understanding and in the end justifies opportunism.

Yet, despite himself, Harman is forced to demonstrate the development of parasitism when he writes:

‘Finance’s destructive role has been quite simple. In its pursuit of profit it scoured the globe looking for opportunities to lend money so as to reap vast amounts in interest payments, undertaking speculation, and raking in fees from overseeing takeovers and privatisations.’ (p6)

A succinct statement of parasitism, but one which he cannot take further because he is never clear whether or not such activities produce profits, or whether they merely represent a claim on profits made elsewhere. He continues: ‘In the 1970s and 1980s this had focused on the poorer countries of the world – lending them so much at such high interest rates that in order to keep up their repayments they were forced to borrow more at even higher interest rates. When such countries ran into trouble, the US, British and European Union governments sent in the IMF to bend them to its will, forcing them to open up their markets to giant Western firms, to sell off their industries to them, to privatise healthcare and to force the poorest parents to pay for their children’s education’ (p6).

This is indeed what happened, but at the time the SWP denied it was of any significance! They wrote then:

‘In fact neither the export of capital nor the “super-profits” of imperialism play the role they once did... It is arguable that there has been no net capital export at all (to the Third World) for long periods in the recent past... Export of capital plays a vital role in modern capitalism but it is overwhelmingly export from one developed country to another. Its economic significance is entirely different...’ (Socialist Worker 28 April 1979).

In other words, there is no imperialism, and the SWP could conclude that this export of capital ‘cannot account for the “corruption” of “labour aristocracies”... by the crumbs of super-profits’. Therefore there was no opportunism, either.

Harman obscures the question as to whether the financial system he describes is productive of surplus value, or profit. On the one hand he says ‘so long as the mountain of debt had produced profit there was nothing but praise for those who ruled over the financial system’ (p8). On the other he says that ‘the great bulk of [the financial system] is concerned only with the distribution of profits between sections of the capitalist class’. Yet if the financial system does not produce profit, where is it all coming from? And, equally importantly, how have the ever-increasing number of workers in the financial sector been getting paid? After all, even Harman has to note that ‘Finance and business services grew to account for four times as much investment as manufacturing and other industries and for almost a third of the economy in 2004’ (p23); in 2005 they employed six million workers. So where on earth was all the money coming from? You will seek the answer in Harman’s pamphlet in vain.

Marx is quite clear: labour in banking and financial services is entirely unproductive of surplus value or profit, and is financed out of the surplus value that is generated through the exploitation of workers employed productively, mainly in industry, manufacturing and transport. Yet, as Harman and many others have noted, there are fewer and fewer such workers in Britain, and their labour does not sustain even a small part of the edifice of British capitalism. There is only one coherent explanation: that Britain’s vastly expanded financial sector and the many well-paid workers it employs are paid out of surplus value sucked in from overseas, specifically through the super-profits derived from the exploitation of productive workers throughout the world, the vast majority of them in the underdeveloped countries. And the figures show this: British imperialism’s external assets expanded from £1,976 trillion (244% of GDP) in 1997 when Labour came to office to £6,486 trillion in 2006 (470% of GDP). This represents in Lenin’s words, ‘a gigantic usury capital’ (see David Yaffe, Britain – parasitic and decaying capitalism). For Harman it is a closed book.

It is this ‘gigantic usury capital’ and the super-profits it extorted that explains why there is no socialist movement in Britain today. Between 1992 and 2006 such super-profits had supported a continuous rise in living standards for the majority of the British working class and petit bourgeoisie. They did not have any need for socialism. So when Harman presents the People before Profit Charter and its basic demands, we have to ask what sort of movement will fight for it. Is it one that continues to make alliances with Labour lefts and their trade union leader allies on the latter’s terms? Or one that breaks completely with that rotten tradition and stands firmly on anti-imperialist principles? Given the various Keynesian journalists and intellectuals, Labour MPs and trade union leaders who have endorsed the Charter, it is evident that Harman and the SWP think that the way forward is once again through compromise with the reformists.

At the end of the pamphlet, Harman says that ‘The answer to the banking crisis is not regulation, or nationalisation of one or two banks, but a takeover of the whole banking system. And the nationalisation should be to stop repossessions and to stop debt strangling the world’s poor...’ (p33). He needs a reality check. At a time when the bankers are dictating to the government, he is calling on the government to nationalise in the interests of the working class what is essentially the core of British imperialism. However if you were a socialist you would have to add that in order to do this you would first have to overthrow the British state, and before that, you would have to build a new movement. This is what socialists should be saying: stand against imperialism and opportunism, break with Labour, and build a new working class movement based on these principles.